"Whilst there are significant pockets of disadvantage and there are areas which are experiencing unemployment, across Australia this Christmas as Australians approach the great festival of the year they can say to themselves we've worked hard this year," he said.

The Shadow Treasurer Joe Hockey says the figures are welcome news amid other economic data that he thinks shows the economy is losing momentum.

Mr Hockey says that data includes the latest national accounts, which showed economic growth had slowed to 0.5 per cent in the September quarter.

This may well be a seasonal matter when you consider that part-time and casual jobs actually increased by 18,100 positions according to the ABS.

Also, it's a very uncertain environment out there especially in retail and services, and not surprisingly, many employers would be more comfortable with part-timers rather than having more full-time staff on the book especially with the lead up to Christmas looking pretty weak.

So the jobless rate is down from 5.4 per cent to 5.2 per cent - despite full time employment falling by 4,200.

Another factor that goes into this is that the participation rate is down slightly to 65.1 per cent and that means that there are fewer people out there looking for work.

But regardless, it is a surprise and very good news that will be welcomed by the Federal Government as it pursues a budget surplus and works to enhances its credentials of being an economic conservative with an election year around the corner.

Commsec economist Savanth Sebastian says the figures show the job market is healthy, but risks remain.

"Given the multispeed nature of the economy, and the sluggishness that we're seeing in retail activity, we may start to see the unemployment rate tick higher," he said.

Mr Sebastian says he expects unemployment will rise again to 5.5 per cent next year.

"You need about 15-16,000 jobs created every month to keep the unemployment rate stable and that's if the participation rate remains stable - that's the real key indicator," he said.

"And after Christmas and into the new year some of those discouraged workers may find themselves back looking for work again and when that takes place we will start to see that unemployment rate tick modestly higher."

The participation rate, or the number of people in work or looking for a job, remains at a six year low, meaning many people have given up looking for work altogether, and are not included in the official jobless rate.

The surprise result has pushed the Australian dollar higher, and weakened the chance of an interest rate cut early next year.

On Tuesday the RBA cut rates to 3 per cent, a figure not seen since the depths of the global financial crisis.

But last night RBA deputy governor Phil Lowe says the figure takes into account the major banks not passing on rate cuts in full.

"The cash rate today is around 1.5 percentage points lower than it otherwise would have been," he told a meeting of economists last night.

"And the fact that the bank has offset the effect of higher funding costs on lending rates means that the normal level of the cash rate is lower than it otherwise would have been."